Bank of America profits fall after bad debt charges

The US housing market crash continues to weigh down on Bank of America's results

Bank of America has reported a big fall in quarterly profits after it had to take another financial hit on bad mortgage debt.

The second-largest bank in the US made a net profit of $732m (£457m) in the last three months of 2011, down from $2bn a year earlier.

The bank's latest one-off charges of more than $5bn date back to the US housing market collapse of 2007-08.

Separately, Citigroup reported a rise in fourth-quarter profits

'Further growth'

Bank of America's one-off charges included a payment of $2.7bn to US government mortgage agency Fannie Mae to settle claims relating to residential home loans. Bank of America confirmed earlier this month that it will pay Fannie Mae $11.6bn in total.

Revenues at the bank in the final quarter of 2012 fell 26% to $19.6bn.

Despite the fall in both profits and revenues, Bank of America chief executive Brian Moynihan said the bank entered 2013 "strong and well positioned for further growth".

The bank's chief financial officer Bruce Thompson added that the bank was now leaving the US housing market crisis behind.

"We've put a lot of risk behind us in 2012, and we just feel we're in a much better place as we head into 2013," he said.

However, he added that the bank could announce further job losses. It cut 5,400 positions in the final quarter of last year, bringing the total to 267,190.